Old must die for the new to live... Ep 107

Speaker A, discussing the necessity of embracing radical change for growth, underscores the concept that outdated business models must be relinquished to make way for successful new strategies. Using examples from the fitness industry and a personal anecdote about a food prep entrepreneur, Speaker A highlights the common fear of loss that hinders necessary transformation. Despite initial setbacks, such as losing clients or reducing employee pay, Speaker A argues that these changes are essential for long-term profitability and sustainability. Speaker B briefly interjects to promote their book, which is aimed at contributing to the community and fostering future business partnerships. Speaker A concludes by encouraging the embrace of change, even when it involves short-term loss, to achieve desired outcomes and growth.

• Emphasizes the importance of change for personal and business growth.
• Discusses the fear entrepreneurs face when considering radical changes.
• Explains that businesses must let go of old models to embrace new, successful ones.
• Highlights the problem of a stagnant business model that fails to attract new customers.
• Suggests that the value provided by the business model is key to customer retention and attraction.

"So I'm calling this the old must die for the new to live. And what's up, Mel? It's a concept that I think a lot of people don't grasp when they're trying to grow or change or make some changes in their business or improve themselves."

This quote introduces the concept that for growth and improvement, whether personal or in business, there must be a willingness to let go of the old ways and embrace new ones.

"And it's a question that I get all the time, because for a lot of the gyms that we work with, we recommend a radical switch in their model, a radical switch in how they train their sessions and how many sessions that they train in terms of their pricing and their packaging and all of these things that they need to do and sometimes even the cost that they pay their trainers."

The speaker is highlighting the comprehensive changes they suggest to gyms, including training models, session frequency, pricing, packaging, and trainer costs, which can be daunting to entrepreneurs.

"And first off, when we do these massive changes, most of the times nothing happens. And it is fear."

This quote addresses the common fear of negative outcomes from implementing major changes, noting that often the fear is unfounded as nothing adverse happens.

"But I actually want to come at this from a different side, more from the vibe of the business in general, like the spirit of the business. And it's that the reality is that the old business has to die in order for the new one to live."

The speaker shifts focus to the overall 'vibe' or 'spirit' of the business, emphasizing that a fundamental transformation is necessary for the new business to thrive.

"You know that if something does not change, it's going to stay the same, which means you know that the model, the vehicle that you are in is not working."

This quote conveys the idea that without change, a business will remain stagnant, indicating that the current model is ineffective.

"The problem is not that you don't have more customers. The problem is that the customers you have aren't getting more customers because the model you have is not providing sufficient value for them to want to bring more people in."

Here, the speaker identifies the core issue: the business model does not provide enough value to encourage existing customers to refer new ones, leading to higher churn rates than can be compensated for by new customer acquisition.

• Discusses a real-life example of a business model evaluation.
• Demonstrates the importance of profitability and sustainability in business planning.
• Highlights the need for entrepreneurs to critically assess their business models for financial viability.

"There was this girl who preps our food for us, right? So she makes all of our food to the macro, personalized for us, and it's great. Saves me a ton of time, and food's good. She's a cool girl. She's really young, and she's, like, just getting her foot into the entrepreneurial door."

This quote introduces a personal anecdote about a young entrepreneur who provides a food preparation service, illustrating the speaker's direct experience with small business owners.

"So I feel like I'm half donating to the charity of entrepreneurialism, but she's like, man, I'd really like to do this full time. And I was like, okay, well, I was like, tell me your business model."

The speaker expresses a supportive attitude towards the young entrepreneur and shows interest in understanding her business model to evaluate its potential for full-time sustainability.

"Right? She's in my kitchen cooking all this food, and I was like, okay, let's look at what this looks like if your week is actually full and she still wasn't making the amount of money that she wants to make if her week was full."

This quote reveals a critical analysis of the entrepreneur's business model, identifying that even with a full schedule, her earnings would not meet her financial goals, suggesting the need for model adjustments.

• Understanding the necessity of changing business models to achieve profitability.
• Importance of pricing strategies that reflect the value of the service provided.
• The concept of letting go of an old business model to embrace a new, more profitable one.
• The potential short-term loss of customers as a consequence of changing business models.
• Transition from charging hourly to a weekly recurring package model.

"You have to change your pricing so that it actually makes sense so that you can make a profit."

This quote emphasizes the need for businesses to evaluate and adjust their pricing strategies to ensure profitability.

"She changes from charging hourly to charging on a weekly basis, puts it on recurring, sells it as a package instead of selling her time."

This quote details the strategic shift from an hourly rate to a weekly package, aiming for a more sustainable and profitable business model.

"You need to let the old model die for the new one to live."

The quote encapsulates the idea that businesses must be willing to abandon outdated models in favor of new approaches that offer the potential for growth and profitability.

• The importance of personalized communication with clients during significant business changes.
• The mistake of using impersonal communication methods with a small client base.
• Recognizing and learning from communication errors in business.

"She emails everyone about the change, which was a big no no."

This quote highlights the error in using impersonal email communication for significant pricing changes, especially with a small customer base.

• The psychological aspect of fear in making business decisions.
• The irrationality of clinging to a failing business model despite knowing it is unprofitable.
• The analogy of personal transformation to illustrate the necessity of fully committing to change.

"We have this fear and it's 100% irrational because at the bottom line we already know that doesn't work."

This quote addresses the emotional struggle business owners face when discarding old models, despite the logical understanding that the old way is not working.

"You have to let the old thing die for the new thing to live."

The repetition of this phrase reinforces the concept that true transformation, whether in business or personal life, requires a complete departure from the old ways.

• The parallels between personal habits and business practices.
• The need for commitment to change without reverting to old habits.
• The concept of embracing new practices fully to achieve desired outcomes.

"If you want to change a part of your, let's say I don't want to drink anymore... You have to let the old thing die for the new thing to live."

By comparing the cessation of a habit to business transformation, this quote illustrates the importance of commitment and the elimination of half-measures when seeking change.

• Emphasizes the importance of full commitment when implementing change.
• Change should be consistent and not partial to be effective.
• Change is a necessary component of growth within a business.

You have to go all in on that new thing.

This quote underlines the necessity of committing entirely to a new direction or strategy when seeking change, rather than doing it half-heartedly.

• Speaker B has written a book titled "$100 million offers."
• The book is available on Amazon and has received positive reviews.
• Speaker B invested significant time into writing the book as a contribution to the community.

I have a book on Amazon. It's called $100 million offers. At over 8005 star reviews, it has almost a perfect score.

Speaker B is promoting their book, highlighting its success and the effort put into its creation, as a way to build rapport with the audience and potentially establish future business partnerships.

• Acknowledges the difficulties that can arise when making changes in a business.
• Encourages embracing change despite potential short-term setbacks for long-term growth.
• Compares business change to letting go of the old to allow the new to thrive.

And sometimes there's a hiccup that happens when you change. But change is part of growth, right?

This quote acknowledges that while change can cause temporary disruptions, it is an essential part of business growth.

• Identifies issues with business models, such as incorrect pricing or inefficient fulfillment.
• Discusses the necessity of making tough decisions, such as adjusting employee pay, to correct business model problems.
• Uses a metaphor to illustrate the importance of not continuing down a failing path.

And if you know you need to change your pricing or you need to change your fulfillment because you're already at full capacity but you're not making money, that's a model problem.

Speaker A is highlighting the need for business owners to recognize and address fundamental issues in their business models, such as pricing and fulfillment, to ensure profitability.

• Discusses the economic realities that may force a business to adjust employee compensation.
• Points out that making necessary changes could result in losing employees but is crucial for the business's survival.
• Relates the decision to make tough changes to a pivotal moment in the film "The Matrix."

Sometimes the economics. Sometimes a yogurt store doesn't pay the people behind the counter $25 an hour. Why? Because it's just not in the economics of the business, right?

This quote explains that business decisions, such as employee pay, must align with the economic realities of the business to ensure its viability.

• Uses a scene from "The Matrix" to metaphorically describe the critical decision point in a business.
• Emphasizes the importance of recognizing when a business model is not working and the need to take a different path.

There's a point in the matrix where Neo gets in the car, it's raining, they stop under the bridge and they're like, lift up your shirt so they can put, like, to suck out the bug that he had in his stomach or whatever. And he's like, what's going on? I'm freaking out. And before he says yes, they stop. They crack open the door. And she looks at neo and she's like, don't go down that road. You know where it goes. And you know that's not where you want to be.

This quote draws a parallel between a scene in "The Matrix" and the decision-making process in business, suggesting that one must be willing to make difficult changes rather than continue on a path that is known to be unsuccessful.

• Recognize the need to leave behind the old to embrace new opportunities.
• Accepting short-term loss or discomfort is necessary for growth.
• Changing habits, pay structures, models, or pricing is part of the transition.
• It's beneficial to let go of customers or practices that do not align with the new model.

"And so take the switch, take the new opportunity, shed the old identity to get into the new one."

This quote emphasizes the importance of being willing to let go of one's current situation or identity to take advantage of new opportunities that align more closely with one's goals.

"Accept the short term loss or discomfort that's going to happen with changing a habit, changing a pay structure, changing a model, changing pricing."

This quote acknowledges that change often comes with short-term challenges or losses, but these are necessary steps in the process of improvement and growth.

• The metaphor of pruning a tree is used to illustrate the need for cutting off old branches (or practices) for new growth.
• Pruning is a painful but necessary process for development.
• Letting go of the old completely is crucial to move forward.

"You have to prune the tree, right? Like trees grow by pruning, which means you have to cut off old branches."

The quote uses the analogy of pruning to explain that growth often requires removing parts that are no longer beneficial, even though it may be a painful process.

"And cutting things is painful. And not only that, you cast them into the fire afterwards, you get rid of it. You burn it. You're done with it, right?"

This quote further elaborates on the pruning analogy, emphasizing the finality of letting go of the old — it's not just about making cuts, but also about ensuring that the old ways are completely discarded to prevent regression.

• Customers may resist price increases due to their own incentives.
• Arguments against change may stem from customers' desire to maintain the status quo that benefits them.
• It's important to recognize that initial decisions might have been made with incomplete information, and adjusting course is necessary when new information is available.
• Fear of change can be an obstacle, but it's essential to overcome it to progress.

"They're incentivized to stay at $49 a month. It makes sense for them to argue with you."

This quote highlights that customers may resist changes in pricing or policy that are not in their favor, but their resistance is based on self-interest rather than what might be best for the business.

"But if you know and then you choose not to do what you know you need to do, that's fear, and that is your fault."

The speaker points out that once informed, failing to act on necessary changes is a result of fear, and the responsibility for any negative consequences lies with the decision-maker.

• It's essential to own the decisions that lead to change.
• Discomfort during the transition is inevitable but must be endured.
• Letting the old ways die is necessary for the new methods to thrive and succeed.
• The new approach is what will ultimately lead to achieving one's goals.

"You have to own it. You have to own the decisions that are going to change."

This quote stresses the importance of taking responsibility for the decisions that will lead to change, acknowledging that the decision-maker is the agent of their own success or failure.

"You have to let the old die in order for the new to live."

The quote encapsulates the concept that in order for new strategies and methods to be effective, one must completely abandon the old ways.

• The speaker encourages the community to excel and join their movement.
• There is a promise of new offerings, profit mechanisms, and acquisition systems to come.
• The speaker expresses excitement for the future developments without revealing too much.

"So lots of love to legend community. And if you all aren't crushing it, you should be."

This quote is a motivational call to action for the community, implying that they have the potential to be successful and should be taking advantage of the opportunities presented.

"We've got some things rolling out that are going to continue to have all the gyms that are working with us crush it with new offers that are already converting, new profit mechanisms, new acquisition systems, all the Gucci."

The speaker teases upcoming initiatives that are intended to enhance the success of gyms collaborating with them, indicating that these new strategies have already shown promise in early applications.